Darrell and the als fell foul of Section 274 strict substantiation, and had maybe a substantiation issue with their Section 170 charitables. Moreover, Judge Cohen found Darrell and the als had other problems, when IRS tried to wild-card in the Section 6751 Boss Hoss post-trial.

“Petitioner’s responses make various other meritless arguments about the validity of the notices of deficiency. We will disregard them for present purposes but note that he is apparently misguided in his citation of legal authorities in the context of his acknowledged ignorance of sections 274(a) and 170(f)(8). With respect to relevant considerations, he suggests that motions made after the record is closed are untimely and that receipt of the evidence probably would not change the outcome of these cases. He is mistaken in the latter regard because our view of the evidence supports the application of section 6662(a) penalties.” Order, at p. 2.

Darrell claims the Boss Hoss won’t change the outcome. Maybe not as to the deficiency at issue (which doesn’t look rosy for Darrell), but it sure would as to the 20% chops.

So IRS gets their wild card. But Darrell also gets his innings.

“Petitioner requests the right to examine the examiner who executed the declarations accompanying respondent’s motions, which we interpret as a hearsay objection to certain representations therein. We will allow limited discovery to propound the questions that petitioner wishes to pursue. In view of his propensity for misguided and meritless arguments, we will limit that discovery to proper areas of inquiry.” Order, at p. 3.

Darrell can hit the IRS declarant with “single, definite” interrogatories, dealing with what declarant declared.

An author, teacher, advocate and trusted advisor, Lew Taishoff is a New York City-based attorney with 51 years of experience in corporate and individual tax and real estate matters. He is an Enrolled Agent, examined and admitted to practice before the Internal Revenue Service, and admitted to practice before the United States ... Continue reading →